Big Four firm moves in
Mothercare administrator axes 2,800 jobs as trading halted
PwC will take over at Mothercare
All Mothercare’s shops in the UK will close with the loss of almost 2,500 jobs, said PricewaterhouseCoopers which has been appointed administrator.
PwC said the UK business”has been loss making for a number of years.”
It said 2,485 retail jobs will be axed and 384 head office and distribution staff.
Zelf Hussain, Toby Banfield, and David Baxendale have taken immediate control of the company’s active trading subsidiary, Mothercare UK and Mothercare Business Services.
Its other subsidiaries are not in administration.
The company generates more than £500m of sales a year from more than 1,000 stores internationally. In the financial year ended March 2019, the brand generated profits of £28.3m internationally whereas the UK retail operations lost £36.3m.
The administrators’ primary responsibility will be to establish the liabilities of Mothercare UK and MBS and to realise their assets in order to make a distribution to creditors.
The board is working with the administrators to secure additional financing to preserve the group’s financial position and future as a solvent group.
It is expected that Mothercare’s shares will continue to trade on the Main Market of the London Stock Exchange, as the company has sufficient cash resources to meet its current operating requirements.
Clive Whiley, chairman of Mothercare commented: “The UK high street is facing a near existential problem with intensifying and compounding pressures across numerous fronts, most notably the high levels of rent and rates and the continuing shifts in consumer behaviour from high street to online.
“Mothercare UK is far from immune to these headwinds despite the strength of the Mothercare brand, its exclusive and quality product range and recognised customer service.
“Despite the changes implemented over the last 18 months contributing to a significant reduction in net debt over the same period, Mothercare UK continues to consume cash on an unsustainable basis.
“The action announced today has been carefully thought through and without it, the existence of the wider Group would be threatened. We know it is right for the wider Group to ensure that Mothercare remains the leading global brand for parents and young children with a bright and solvent future within the international franchise business.”